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The IR35 trigger question in the P35

Recently, Keith Gordon a barrister at Atlas Chambers, has apparently got HMRC to concede that Regulation 73 of the income Tax (Pay As You Earn) Regulations 2003 (SI 2003/2682) does not specifically require the completion of question 6 in part 3 of the P35.

The question is included on the end-of-year P35 return to support HMRC processing systems, and is intended to facilitate the effective administration of the PAYE system.

Whilst there is no statutory obligation to complete the question, it is a useful reminder to employers about their IR35 obligations.

If a personal service company is unsure about IR35, or how to respond to these P35 questions, please contact Tax Networks Ltd on 0779 123 2051. However, if employers are unsure of their position then they should answer "no" to question 6 of the P35.

HMRC says "We will shortly be issuing guidance to this effect." In the meantime HMRC's current advice to Keith Gordon was to contact their Employers Help Line. I believe his published response* was on the lines of:

"Why should I, or any employer, call HMRC (and wait for someone to answer the telephone) to find out what we probably know already, when the question should not be asked in the first place? If it should not be asked, then it does not need to be answered. If it does not need to be answered, why should anyone waste their time ascertaining how to answer it?" Quite brilliantly put.

Of course, there is a similar question in the SA tax return to be completed by the director of the personal service company...

paragraph 27 at

* see